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Value Engineering works well because the focus is on value and the key stakeholders get a say in defining the value and what’s important to them or their customers says Andy Cooper

February 24, 2018
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Andy Cooper is the Group Manager Global for Software Education.He has over 30 years of experience working for technology companies such as CA, Oracle and Informix and Accenture in business and consulting roles and has led and worked in teams spanning NZ, Australia, Asia and the US.

Andy is a frequent speaker at conferences talking on a range of topics involving applying agility in a business context.

You have been in leadership roles for many years now; what are the challenges Business leaders face in making swift and effective decisions?

Technology is driving things at an accelerated almost exponential pace, yet most leaders have not devoted enough time to update their knowledge and skills via focused attention to adaptive learning. I see many people stuck with mental models that are out of date and not able to serve them well as things continue to change. As the world gets more complex, they get busier, more stressed and less able to cope. The circuit-breaker to this is a recognition that learning and learning to learn and learning from learning is the only way that you’ll survive and thrive. As a consequence of these out-of-date mental models, decision-making becomes impacted with people often solving complex problems with simple and simplistic solutions rapidly with disastrous consequences or struggling to make a decision because they are drowning in information and do not have an approach that allows them to move forward. There are some effective tools and approaches to decision-making that leaders need to acquire and apply. They’ll learn that it’s not about effective decision-making because that is only known after the fact, it’s about approaches that allow you to probe, sense and respond and adjust as you need based on the best and least wasteful amount of information needed to move forward.

Agile has always been about delivering value to customers, but organizations have struggled to focus on value; what in your opinion are the reasons for this?

The Agile manifesto specifies and supports a value-based approach to delivering the highest value items first. The issue for most teams and organizations is how do they quantify this and how are they measured? Many teams are measured on things like velocity, story points delivered and possibly some defect metric. The problem with this is that it assumes value in story points and velocity is really only a throughput metric so has no real business value in its own right. When we use Value points, we consider the range of factors that underpin the business or other value that the solution provides and rank this against the other needs and the cost of delivering it. Value points is a relative measure that focuses and looks purely at why we are doing something and the cost of doing it.

Can you please explain the Value Engineering approach for decision making?

Value Engineering is a fancy term for a simple context. In value engineering, we look at the factors that make the product or feature valuable to the customer and rank the importance of these and then we score every item against these value factors. We also look at the cost, cost of delay and risk for these features and that gives us a relative value score of Value / Cost. The science of this is figuring out the correct value factors and having a decent sense of the cost. We use the best information we have at hand to create relative scores. It is a light-weight approach to make decisions for what is in many cases complex problems.

What are the advantages of using this approach in strategic decision making?

It works well because the focus is on value and the key stakeholders get a say in defining the value and what’s important to them or their customers. It provides an easy way to create a value-based backlog of ideas and initiatives that can be used in any area where you need to make value-based decisions. This could be for selecting strategic initiatives, prioritizing a Product Owner’s backlog, allocating marketing funds, or even more simple examples. I’ll be looking at one of these in the talk.

What are the key takeaways for the attendees from your talk?

Developing a more effective value-based decision-making approach. We’ll also walk through an example that they can use and apply for future situations. Attendees will also be given access to some tools and guidelines that they can download and use for immediate value.